Neobank Becomes the Next KoinWorks Validation, Leads MSMEs to Be Bankable

The p2p lending business in Indonesia is slowly entering the adult phase. Meanwhile, equitable access to finance for MSMEs is still an unresolved homework.

KoinWorks, which recently started working on Neobank, believes that this solution can help MSMEs slowly level up from being underserved and underbanked to bankable.

KoinWorks Co-founder & CEO Benedicto Haryono said that as long as they were a p2p lending company, it turned out that the conversion rate of the business was relatively low, aka below 10% of the total incoming leads.

This condition occurs because the MSMEs are overfinanced, have not been eligible for funding, or are not in need of funding. The segment that was rejected by KoinWorks actually has potential that can be worked on in the future, considering that the type of loan provided is productive.

“We thought what if we gave a more general product, it doesn’t need a lot of requirements. This can be a solution, so that if they need credit, they are qualified and can immediately get funding,” said Ben, Benedicto’s nickname.

About the KoinWorks NEO Platform

It is an integrated financial platform for MSMEs, freelancers, content creators, and start-ups. With NEO Card and financial management services in it, this product enables users to fulfill their business needs.

Be it remittances, payment link services to create payment links, monitor financial condition and expense reports, and all the financial literacy assistance business owners need in order to grow their business.

Through this platform, the company provides its own added value that is different from lending. When explored, other MSME issues are financial records that have not been integrated or are still manual, using books or Excel which are done directly by the business owner because of limited resources.

In the end, a lot of time was wasted, business owners could not focus on developing their business further. In more detail, one of the solutions offered through Neobank is to provide accounts receivable that are automatically reconciled and equipped with an auto-reminder feature for re-billing.

It is hoped that this solution will make the business owner’s time more efficient, even from the point of view of increasing consumer experience.

“The company want to encourage these MSMEs to start managing finances, operations, and grow with us, before receiving financing from us.”

He continued, the business, which has been helped by KoinWorks for five years of operation, is claimed to have an impact that can be seen from the average sales growth growing well. The number of businesses that have been assisted has reached more than two million loans.

“So this neobank validation is part of the mission we implemented from the start that we want to realize more helping MSMEs in Indonesia.”

Leveraging Partnerships with Various Parties

In building KoinWorks NEO, continued Ben, the company took advantage of partnerships with various partners through the BaaS mechanism, not yet Open API. He reasoned that KoinWorks’ needs as a company are more specific and customized for MSMEs.

Meanwhile, in the Open API solutions that are present in the industry so far there is no specific answer to these needs, it is still limited to consumers.

“So we work directly with financial partners and only use features that are relevant to us from Open API players such as Finantier, Ayoconnect, and Brick.”

Detailed by Ben, KoinWorks NEO has a financial management service that automatically combines financial activities and money movements; quick and easy access to business loans, for example access to various loans for various purposes such as including earned wage access (EWA) for their employees and installment loans.

Finally, the virtual card “NEO Card” which functions as a prepaid and charge card is supported by Mastercard and BNI to make online transactions easier through the Virtual Card Number (VCN) feature.